KPMG UK has released its yearly results for the financial year ended 30th September 2022. The firm delivered double digit growth for the second year running, recording a 16% rise in revenue from £2.35bn to £2.72bn, with profit before tax increasing from £436m to £449m.
This solid performance follows a record level of investment made by the firm. This year it invested £130m into new hires, alliances and technology as part of its leadership team’s long-term strategy to develop the business, build new services and hire new expertise to support the firm’s clients.
KPMG also invested heavily in its people and in May awarded employees a special overnight flat salary increase of between £2,000 and £4,000. The rise was progressive and designed so that the firm’s more junior employees received the most proportionally. It was in addition to the annual pay increases awarded by the firm to staff in Autumn 2021.
In total KPMG increased its annual wage bill by £132m. It also distributed a significant bonus pot of more than £105m to employees.
Jon Holt, Chief Executive of KPMG in the UK, said: “We have delivered another year of strong performance thanks to the hard work and dedication of our people. Our three-year strategy, focussed on investing for the long-term, is delivering. We’re growing in a way that enables us to invest for the future, meet client demand, strengthen our multi-disciplinary services and recognise our people.
“Every area of the business contributed to our growth, showing the important role our multi-disciplinary model plays to support our clients with their most complex issues.”
Delivering for clients
The firm recorded double-digit sales growth in each of its major business units. KPMG’s Consulting practice saw net sales increase by 22% to £811m, driven by demand from clients for digital transformation services. Meanwhile, a strong M&A market saw the firm’s Deal Advisory team record net sales of £443m, an increase of 24% on the prior year.
The firm’s audit practice saw net sales increase by 10% to £695m, while its tax and legal division delivered strong growth of 13%, with sales reaching £455m.
Jon Holt commented: “Our business is resilient, and we’re well placed to help our clients navigate the next stage of the economic cycle. We feel confident about the future, and while we have seen a softening in the deals market from the peak of activity witnessed last year, demand for consulting, tax, legal and audit services continues unabated. We are investing heavily now, to ensure we have the right people and technology in place to help our clients through the challenges they may face in the coming year.”
Investing in the business
The firm invested £130m in a range of new alliances, technology and senior hires to provide new services and insights to its clients, and to support the firm as it rolls out and tests its hybrid working model.
These investments included the creation of a new 25,000 sq ft innovation and technology hub in the firm’s Manchester office, which will open in 2023, and the formation of a new joint venture with Venture Capital advisory firm Acceleris, to support entrepreneurs across the UK to access finance and grow their business.
KPMG also launched a new five-year partnership with the University of Cambridge on the ‘Future of Work’, which will examine the big issues affecting the modern workforce and offer practical, research-backed solutions to employers, starting with what really works when it comes to supporting employees’ mental wellbeing.
The partnership is a global first and sees the University of Cambridge bring together researchers from different disciplines to better understand the factors that affect mental wellbeing at work. It will show how different kinds of supports can boost individual mental wellbeing, enhance productivity and promote a healthy workforce for the future.
KPMG will open its doors to Cambridge researchers, who will assess the effectiveness of the mental wellbeing initiatives the firm currently offers to its UK employees. This will develop an evidence base of what works and how new support measures can be developed and evaluated to meet employees’ future needs. The firm will use these insights to invest in and evolve its package of mental wellbeing support.
Investing in its people
The firm’s strong performance enabled it to invest heavily in its people, promoting 2,649 employees, appointing 129 new partners and hiring 3,638 people and 1,012 graduates and apprentices.
KPMG continued to review and enhance the benefits and support it offers to its people, introducing a new benefits package to support colleagues going through the menopause. The package provides all colleagues access to a menopause trained GP and personalised care plan, as well as 24/7 access to a menopause trained nurse. To support wellbeing, the firm continued its popular ‘Jump Start’ programme, where over the summer months employees are encouraged to finish at lunchtime on Fridays, or on another day of their choosing.
Investing in communities
The firm invested further in its outreach to drive social mobility and tackle disadvantage in communities across the UK, through providing literacy, numeracy and lifelong learning programmes and individual mentoring.
More than 6,000 KPMG employees volunteered over the year and supported more than 64,000 people. Volunteers tutored young people, read with school children to boost their literacy skills and ran employability and skills development programmes in schools. A highlight of the year was celebrating National Numeracy Day’s fifth milestone. KPMG co-founded the campaign in 2018 with the charity National Numeracy and over five years the campaign has grown exponentially. Through convening nearly 5,000 organisations, undertaking research and providing free practical resources and volunteering, National Numeracy Day 2022 inspired people to take over 450,000 actions to improve their numeracy – five times that of 2021.
KPMG was named Business of the Year at the Business Charity Awards in 2022 and was awarded the Consortium Award for its work with the National Literacy Trust’s Vision for Literacy Business Pledge. The firm supported Marie Curie, providing nearly £500,000 worth of support to the charity through fundraising and pro bono work. KPMG has extended its partnership with Marie Curie for a further year, to support the charity as it navigates the cost-of-living crisis.
KPMG was also recognised by CDP, a global non-profit that runs the world’s environmental disclosure system for companies and regions, as a leader in corporate transparency and performance on climate change, securing a place on its ‘A List.’ Based on data reported through CDP’s 2022 Climate Change questionnaire, KPMG is one of a small number of companies (283) that achieved an ‘A’ rating out of nearly 15,000 companies scored. KPMG has also been recognised as a CDP supply chain leader.
Driving inclusion and equity
The firm also published the most extensive ‘progression gap’ analysis ever undertaken by a business. For the study, experts from the Bridge Group analysed the career paths of over 16,500 partners and employees at KPMG over a five-year period. The team examined the average time it took individuals to be promoted, looking at their gender, ethnicity, disability, sexual orientation as well as socio-economic background.
The data showed that socio-economic background, measured by parental occupation, had the strongest effect on an individual’s career progression, compared to any other diversity characteristic. Individuals from lower socio-economic backgrounds took, on average, 19% longer to progress to the next grade, when compared to those from higher socio-economic backgrounds.
The study is the latest advancement by KPMG to deepen understanding of social inequalities in the workplace, while sharing its insights with the wider business community. The firm has published an action plan to address the findings, which includes reviewing its approach to work allocation and launching a new promotion readiness programme to support talented individuals from historically underrepresented groups.
Jon Holt said: “This study is pioneering in its scope, and I hope adds value and rigour to the debate around social mobility. As a firm these insights are enabling us to take targeted action and we are publishing our findings so other organisations can use them as a blueprint to measure and address barriers in their own businesses.
“Talking about socio-economic background is complex and emotive. It requires all of us to confront how our upbringing shapes the opportunities we have access to later in life. But as leaders we need to lean into this discomfort and take action if we are to drive greater equality in business.”
Key points from the 2022 annual results:
- The firm posted growth of 16%, with revenue rising from £2.35bn to £2.72bn* and profit before tax increasing from £436m to £449m.
- The firm has 786 partners and 16,036 employees.**
- The firm’s colleagues are: 49% women; 30% are from an ethnic minority background; 6% are Black Heritage; 4% are Lesbian, Gay, Bi; 8% have a disability or a long-term condition and 21% are from a lower socio-economic background.
- 22% of KPMG UK’s board are from an ethnic minority background, 22% are from a lower socio-economic background and 44% of the board are women.
- KPMG UK’s Executive Committee is 55% female and 20% are from a lower socio-economic background.
- Total tax paid and collected totalled £1.01bn to HMRC.
- Average partner reward increased from £688k to £757k.***
- Bina Mehta, Chair of KPMG, received total remuneration of £1.292m.
- Jon Holt, Chief Executive of KPMG, received total remuneration of £2.72m.
- KPMG UK’s gender pay gap for colleagues and partners reduced by 2.6 percentage points to 20.9% (median) and reduced by 4.9 percentage points to 32.1% (mean). These figures include both employees and partners.
- KPMG remains one of the most popular employers in the UK. It is listed in the Top 10 of LinkedIn’s best workplaces to grow your career 2022 and featured in the Times Top 50 Employers for Women for the 12th consecutive year.
- The firm also ranked in the top three Social Mobility Employer Index compiled by the Social Mobility Foundation, Social Mobility Commission and the City of London Corporation, for the sixth consecutive year.
